|Bid||39.20 x 4000|
|Ask||39.40 x 3000|
|Day's Range||36.26 - 39.22|
|52 Week Range||33.83 - 106.96|
|Beta (3Y Monthly)||1.68|
|PE Ratio (TTM)||23.79|
|Earnings Date||Jan 24, 2019|
|Forward Dividend & Yield||2.00 (5.48%)|
|1y Target Est||63.12|
Investing.com -- VF Corporation, Schlumberger and Western Digital were in rally mode Friday, underpinning the broader market.
What Memory Industry Downturn Could Mean to Micron Investors(Continued from Prior Part)Analyst ratings for Micron So far in this series, we have seen that Micron Technology (MU) and Western Digital (WDC) stock bottomed out in 2018 as they moved
(PAX Booth #10683) – Western Digital Corp. (WDC) today introduced its second-generation, high-performance WD Black® SN750 NVMe™ SSD with up to 2TB capacity on a single-sided M.2 form factor, and will be showcasing a version for desktop systems or custom-built gaming rigs, which has an integrated heatsink that helps maintain speed and temperature. To take advantage of the increasingly immersive and responsive in-game experiences, gamers must navigate several challenges, including higher performance demands and large file sizes, with some games approaching file sizes exceeding 100GB. To support very fast read and write data speeds, traditional NVMe SSDs are designed to throttle performance in order to keep the drive’s operating temperature within acceptable parameters.
What Memory Industry Downturn Could Mean to Micron Investors(Continued from Prior Part)Micron’s stock valuation In 2018, Micron (MU) moved from a memory uptrend to a downtrend in the second half of 2018, which reduced its earnings after it peaked
While the third and fourth quarters of this year could be difficult for Western Digital Corp (NASDAQ: WDC ), concerns about the company's balance sheet appear overblown, according to Wells Fargo. The Analyst ...
What Memory Industry Downturn Could Mean to Micron InvestorsMicron’s stock price movement Memory stock prices recorded significant movement near the beginning of the year. Stocks of memory chipmakers Micron Technology (MU) and Western Digital
Western Digital (NASDAQ:WDC) had a rotten 2018. WDC stock lost more than half its value, plunging 53.5% for the year. That made it the seventh-worst performer in the entire S&P 500. This year is not off to much better of a start. WDC is up just 2% so far, compared to far bigger gains for the market and tech stocks in particular. It's not hard to see why Western Digital stock has crashed. The company's hard disk division continues to fade in importance, while the flash memory business is facing cyclical pressures and strong competition. But at 6x earnings, there has to be a bullish case for WDC stock here, right? Let's look at the optimistic and pessimistic views on Western Digital stock. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy as the Dollar Weakens ### The Case Against WDC Stock The bearish case on Western Digital is pretty simple. The company dominates in the traditional hard disk drive "HDD" market, but has far less market share in the increasingly popular solid state drive "SSD" category. This is a major problem, as Western Digital is far more profitable in the HDD market. For now, HDD drives still have a major cost advantage versus SSD. But the price of SSD continues to plummet. SSD is more attractive as it has the advantages of using no moving parts, consuming less power, and taking up less space. As HDD's lower price becomes less and less of a factor, SSD will gradually take over its remaining applications. In HDD, it's just Western Digital and Seagate (NASDAQ:STX) making up more than 80% of the market. Over in SSD, it is far more competitive. Samsung is the leading player. However, no one has more than 25% market share, and there are more than a dozen active competitors. Western Digital made its Sandisk acquisition to try to muscle into the SSD space. But so far, it has not shown any sort of cost or technological edge that would enable it to earn consistent higher profit margins, as it has been able to do in HDD. As the market continues to shift from HDD to SDD, Western Digital's profits will decline as it loses its high margin business and ends up fighting a price war with Samsung and others in the SDD arena. ### The Case for WDC Stock Bears argue that the erosion in the HDD market combined with too much competition in SSD will doom Western Digital stock. On top of that, it appears the cycle has turned downward for memory as well. In the past, down cycles have led to huge erosions in profit margins for the storage players. Bulls can credibly respond, however, that this time will be different. Now, unlike in the past, memory demand is growing much more slowly. This limits how far the industry can get out of whack from a supply/demand standpoint this time around. Even assuming profits are going to drop from both HDD and SSD, how far realistically could they fall? The company, backing out one-time items, is trading around 5x trailing earnings and under 6x forward earnings. With earnings in the $6/share area, even a moderate earnings shortfall hardly makes WDC stock look expensive at $37. On an EBITDA basis, the company is selling for under 4x. You rarely see companies sell for under 5x EV/EBITDA - or 6x earnings for that matter - unless the business is dying. While HDD is fading, it won't fully go away all that soon, and Western Digital has a defensible position in SSD as well, even if it isn't as profitable. ### WDC Stock's Dividend: Can You Trust It? While it didn't matter much when Western Digital traded up at $100, the dividend has now become very interesting. WDC stock offers $2/year (50 cents per quarter) in dividends. When WDC stock was riding high, that amounted to just a 2% yield. With WDC stock now under $40, however, the dividend yield is greater than 5%. It's hard to find tech companies that will pay you that well to hold their shares. However, not all is well with the dividend. Investment bank Evercore downgraded WDC stock to underperform earlier this week. WDC stock got mauled following the downgrade as Evercore didn't just speak negatively of the company's outlook, it specifically warned about a dividend cut. Evercore suggested that the company's free cash flow of just $2.35/share for this year barely covers the $2.00 dividend obligation. Combined with $6.5 billion in debt after factoring out cash, Evercore's analyst suggested that there was "clear risk" to the current dividend payout. For what it's worth, Evercore also cut its price target to just $30, suggesting another 20% downside from here. ### WDC Stock Verdict It's understandable why the market has punished Western Digital stock so dramatically. The company's cash cow traditional hard disk business is in steady decline. Over time, it will become obsolete. Western Digital wisely made a big move into flash memory to reinvent itself while it still has strong cash flows. Unfortunately, the SSD market is currently on a downswing, which will limit Western Digital's profits over the next few quarters. On the balance, however, it's easier to side with the bullish arguments. Western Digital clearly still makes a ton of money. Look at the forward PE ratio of 6 even with 2019 shaping up to be an off year. When the cycle turns back up, it's hard to imagine that Western Digital can't get back to at least an 8x or 9x PE ratio, which should put the stock at $50 or higher. On top of that, you have the strong dividend (though it could be cut) and a share buyback program to support the stock price. WDC stock is clearly a falling knife at this point. But for the brave, this entry point could lead to strong returns over the next 12 to 24 months. At the time of this writing, Ian Bezek held no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Growth Stocks With the Future Written All Over Them * 7 Reasons Why Buffett's Bet on Apple Stock Is a Good One * 10 Companies That Could Post Decelerating Profits Compare Brokers The post Sure Western Digital Is Struggling, but WDC Stock Looks Like a Good Buy appeared first on InvestorPlace.
Western Digital (WDC) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Investing.com – Western Digital fell on Thursday, stifling gains in semiconductors after Wall Street turned bearish on the data-storage company on worries over upcoming earnings and guidance.
# Western Digital Corp ### NASDAQ/NGS:WDC View full report here! ## Summary * ETFs holding this stock are seeing positive inflows but are weakening * Bearish sentiment is moderate and increasing * Economic output for the sector is expanding but at a slower rate ## Bearish sentiment Short interest | Neutral Short interest is moderate for WDC with between 5 and 10% of shares outstanding currently on loan. This represents an increase in short interest as investors who seek to profit from falling equity prices added to their short positions on January 10. ## Money flow ETF/Index ownership | Negative ETF activity is negative and may be weakening. The net inflows of $4.81 billion over the last one-month into ETFs that hold WDC are among the lowest of the last year and appear to be slowing. ## Economic sentiment PMI by IHS Markit | Negative According to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Technology sector is rising. The rate of growth is weak relative to the trend shown over the past year, however, and is easing. ## Credit worthiness Credit default swap CDS data is not available for this security. Please send all inquiries related to the report to firstname.lastname@example.org. Charts and report PDFs will only be available for 30 days after publishing. This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
In the latest trading session, Western Digital (WDC) closed at $37.83, marking a +0.4% move from the previous day.
Why Micron Is Better-Positioned for a Cyclical DownturnMemory market in a cyclical downturn The memory chip market was hit by a cyclical downturn in the second half of 2018 as DRAM (dynamic random-access memory) and NAND (negative AND)
Micron Technology (NASDAQ:MU) opened Jan. 14 at about $35 per share. During its 2018 fiscal year, which ended in August, Micron earned $12.27 per share, and in the November quarter it earned another $2.80 per share. That means its price earnings ratio, the price of Micron stock over its earnings per share, is under three. If its earnings were cut in half it would be 6. If its earnings were cut by 75% it would be 12. The current PE for the average stock in the S&P 500 is about 20. But Micron earnings aren't expected to be cut by 75% when it reports earnings in March. Analysts expect it to earn $1.77 per share. Keep up that pace and you're looking at a PE of 5.5. InvestorPlace - Stock Market News, Stock Advice & Trading Tips What's going on? * 8 Dividend Stocks With Growth on the Horizon ### The Memory Cycle and Micron Stock Memory chips, which are Micron's business, are commodities. Their price is very sensitive to changes in supply and demand. Analysts expect prices to fall 20% this year thanks in part to the busting of the crypto-mining boom, even as companies like Micron scale back expansion plans. But scaling back is not the same thing as going broke. Micron had over $5.5 billion in cash on its books at the end of November, and long-term debt of just $3.7 billion. Its capital budget last year was $8.9 billion, but it can easily be adjusted downward, and it is being adjusted downward. CEO Sanjay Mehotra has been through these cycles before. He co-founded SanDisk in 1988 and ran it until it was bought by rival Western Digital (NASDAQ:WDC). He has held 70 patents on memory technology. The company's leadership is as sound as its balance sheet. ### The Memory Menace Micron does expect its business to slow and told analysts that at its December earnings day. The result was a panic, shares falling from $40 to below $30, from which they have since somewhat recovered. The assumption of speculators is that China will destroy Micron and the other memory chip players with enormous production that overwhelms the current "super cycle" in memory, as chips replace moving hard drives in data centers and PCs. Memory chips are at Memory chips are at the heart of the current U.S.-China trade war. New competition in the data center is also expected from "laser assisted" hard drives, with capacities starting at 16 Terabytes, 8 times the capacity of Micron's current chip drives. ### The Super Cycle and Micron Stock The fact is that memory chips, and chips in general, are still in a "super cycle," which is what we say when new markets are developed. In this case, it's the automation of just about everything, from factories to warehouses to planes, trains and automobiles. Sensors and memory chips, linked to wireless networks, can replace expensive service calls with routine maintenance, creating efficiency in the supply chain and new demand for convenience from consumers. This isn't just true for machines. It's also true for you, as monitoring replaces checkups for healthy people through devices like the Apple (NASDAQ:AAPL) Watch. Growth in cloud is still averaging 32% per year, and even conventional data centers aren't disappearing. Demand there is growing at 13% per year. ### The Bottom Line on Micron Stock Fear in the memory market is overdone, and this is making Micron stock a bargain. This realization has sent it up 20% off those December lows. Of 34 analysts following Micron stock, 20 still have it on their buy lists, and only two have dropped to the "hold" category even as the shares are down 15% over the last three months. Sometimes when a stock looks cheap it's because there's a fundamental problem with it. Sometimes it's because of raw fear, a buying opportunity. If you can hold Micron shares for a few years this looks to be the latter. Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AAPL. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Companies That Could Post Decelerating Profits * 10 A-Rated Stocks the Smart Money Is Piling Into * Mizuho: 7 Long-Term Value Stocks to Buy Now Compare Brokers The post This Is No Time to Panic When It Comes toÂ Micron Stock appeared first on InvestorPlace.
# Western Digital Corp ### NASDAQ/NGS:WDC View full report here! ## Summary * Bearish sentiment is moderate and increasing * Economic output for the sector is expanding but at a slower rate ## Bearish sentiment Short interest | Neutral Short interest is moderate for WDC with between 5 and 10% of shares outstanding currently on loan. This represents an increase in short interest as investors who seek to profit from falling equity prices added to their short positions on January 10. ## Money flow ETF/Index ownership | Neutral ETF activity is neutral. The $9.28 billion in inflows that ETFs holding WDC received over the last one-month is a decline from earlier in the period and among the weakest of the past year. ## Economic sentiment PMI by IHS Markit | Negative According to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Technology sector is rising. The rate of growth is weak relative to the trend shown over the past year, however, and is easing. ## Credit worthiness Credit default swap CDS data is not available for this security. Please send all inquiries related to the report to firstname.lastname@example.org. Charts and report PDFs will only be available for 30 days after publishing. This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Western Digital's (WDC) growth has been hampered by increasing competition in the enterprise SSD category and it's risk to cut dividend led to the downturn.
The firm’s analyst C.J. Muse lowered his rating for Western Digital stock to Underperform from In Line, predicting pricing for its storage devices will keep falling. “While greater NAND weakness is well known in the marketplace, we believe the market doesn’t fully appreciate the negative consequences to Western Digital and its structural competitive issues,” he wrote Monday. NAND is flash memory, which is used in smartphones and solid-state drives.
sank after a critical analyst report says the data storage company may be forced to cut its dividend amid stiff market competition. The combination of "free cash flow tracking to ~$2.35 per share" in 2019, combined with Western Digital's $11 billion in gross debt, poses a "clear risk to the annual dividend of $2 per share," wrote Evercore ISI analyst C. J. Muse in a report released Monday morning. Western Digital's stock price fell more than 4.9% Monday to close at $38.06.
Major market indexes fell for a second straight session in the stock market today, though they pared steep early losses to close near their intraday highs.
Evercore Analyst: Is Western Digital’s Dividend Sustainable?Evercore ISI analyst downgrades Western Digital The world’s third-largest NAND (negative AND) chip manufacturer, Western Digital (WDC), saw its stock fall 6% in the first half of today’s trading session after Evercore ISI analyst C.J. Muse downgraded the stock, raising doubts about
2018 was a terrible year for some technology stocks. Micron (NASDAQ:MU) and Nvidia (NASDAQ:NVDA) are the slow-mo and mo-mo examples in the sector. MU stock is almost always the value trade, while Nvidia stock was the fast runner of the bunch. With the exception of Advanced Micro Devices (NASDAQ:AMD), most tech stocks were beaten down hard. In fact, the VanEck Vectors Semiconductor ETF (NYSEARCA:SMH) fell 11% in the past 12 months. Investors have been fickle with tech, especially Micron stock. Last June they were in a race to buy it at $60 per share. By Christmas they had cut it in half. They did both with conviction and both extremes are wrong. Somewhere in the middle lies the truth. Meanwhile, the fundamentals had not changed much between the two time periods. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Last week, MU was upgraded and the stock rallied sharply off the bottom. This morning it falls on a downgrade of Western Digital (NASDAQ:WDC). The analyst cited reasons that included their worries over the WDC dividend. This sounds specific to that company, yet once again, MU stock looks to indirectly suffer today on that headline. Last week, Micron stock had a great price action, as it was able to rise above the Christmas mega-dip neckline to $29 per share. So now the onus on the bulls is to hold it so they can establish it as forward support. * 7 Pharmaceutical Stocks That Just Raised Prices This Year Therein lies the opportunity with MU today, but it is longer term than just then next few days of trading. Micron stock is one to own for the long term on the thesis that tech is here to stay for decades to come. We have a few suppliers to that technology and Micron is one of the successful ones that will prevail once this crisis of sentiment abates. Investors should own it for the long term. ### How to Approach MU Stock Today On the way down in December, the smart money didn't wait for others' blessing of the stock to go long. Value spoke for itself. I was lucky to sell puts into the fear to generate income and reserve the opportunity to own it even lower than it was then. But now the opportunity to buy into a long-term position is also still viable. Last week, the masses scampered to capture the upside potential and MU stock rallied 10%, which takes away from the easy money off the extreme Christmas lows. But it is not too late to get in, especially thanks to this morning's negative price action in sympathy with WDC. MU is a quality company with proven management and a healthy business operation. It is not a fad. It has a sturdy footprint in technology and our lives are now more dependent on it than ever. There is almost nothing that we do that is not connected to the cloud one way or another. Amazon (NASDAQ:AMZN) moved our shopping online and our data onto its AWS. Netflix (NASDAQ:NFLX) changed the way we consume media and liberated us from the TV room. The future is clearly digital and MU will remain a part of it. Fundamentally, Micron stock has a ton of value as it trades at a trailing price-to-earnings ratio of 3. While the stock was in free fall, the experts feared that it would be a value trap. MU's trap if at all is usually a temporary one. Eventually, the experts realize the discrepancy and buy it up once more. * 10 A-Rated Stocks the Smart Money Is Piling Into There are circumstances of inventory that affect prices and margins for MU and its competitors do raise additional fears. But this happens occasionally and management knows how to deal with it. This time, the economic war between the U.S. and China contributed to the problems. The tariff wars definitely changed order flow and caused exaggerated fear levels. Consequently MU stock fell 50% from its high of $62 per share in only six months. Technically, Micron stock is not likely to rocket higher without dips. This morning is a prime example of dips that are necessary to solidify the levels just passed below. Rallies need periods of consolidation, or else they become frothy and too ginger to hold. Now that the overall market sentiment is improving, these MU stock dips will be buying opportunities and buyers will step in to support the stock. Click here and enjoy a free video and more of my market thesis and get an ongoing free copy of my weekly newsletters. Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on Twitter and Stocktwits. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Key Emerging-Market Stocks to Buy for Contrarian Investors * 7 Stocks at Risk of the Global Smartphone Slowdown * 7 Pharmaceutical Stocks That Just Raised Prices This Year Compare Brokers The post Why You Should Buy Micron Stock Now for the Long Run … Not Sell It appeared first on InvestorPlace.
"The current competitive positioning for WDC is not ideal," Muse says, adding the company's annual dividend could be at risk. Shares of data storage company Western Digital WDC fell more than 4 percent in the premarket Monday after an analyst at Evercore ISI said the market has not fully price the competitive hurdles the company faces. "The current competitive positioning for WDC is not ideal as we estimate WDC's enterprise SSD (solid state drivers) share has roughly halved in the last few years to ~12%," analyst C.J. Muse wrote in a note Monday.